Asian and Nordic shippers have adapted their supply chains to the longer transit times around Africa, but freight rates need to settle at acceptable levels

01 February 2024
All major carriers are diverting Asia-Europe services around the Cape of Good Hope rather than through the Suez Canal, and some carriers are temporarily adjusting their pro forma networks to provide beneficial modified ETAs to customers. CMA CGM does not sail through the Red Sea and Suez Canal. The company is the latest shipping company to confirm that it will not be sailing through the Red Sea and Suez Canal, says theLoadstar.

Fr om mid-December to mid-January, the average container spot rate on this route jumped nearly 200% to about $5,000 per 40-footer. Some shippers, desperate to ship their products before next week's Chinese New Year, were required to pay up to $10,000 per 40-foot to guarantee facilities and shipments.

The Ningbo Container Freight Index (NCFI) Commentary, for example, reported that "demand has declined" and that "carriers have reduced freight rates slightly."

In fact, Drewry's WCI Asia-Northern Europe component fell another 6% last week to an average of $4,661 per 40 ft.

"Freight rates need to come down from these extraordinary levels, but hopefully they will settle down to acceptable levels wh ere carriers can still make a decent profit," the director of the U.K.-based NVOCC told The Loadstar last week.

'Initially, I think some shipping lines tried to take advantage of the situation and put fear in the minds of shippers, suggesting that they might not be able to guarantee their facilities and that containers were in danger of overturning.'